Legal Fallout From Housing Collapse Continues

The announcement by the Federal Reserve of an “enforcement action” against Goldman Sachs for engaging in “a pattern of misconduct and negligence” in its handling of home mortgage loans was entirely predictable. Charges of such misconduct go back for months when it was first discovered that mortgages and other mortgage-related documents had been “robo-signed” and foreclosure documents hadn’t been properly reviewed and that Goldman’s Litton Loan Servicing unit took actions “without always confirming that documentation of ownership was in order.”

The ruling requires Goldman to write down some mortgages that it holds, pay an unstated restitution, and provide “remediation” to homeowners who were hurt in the collapse. The ruling doesn’t preclude other enforcement actions from state banking regulators who are continuing their investigations into the matter, either, so additional sanctions may reasonably be expected soon.

The announcement by the Federal Reserve of an “enforcement action” against Goldman Sachs for engaging in “a pattern of misconduct and negligence” in its handling of home mortgage loans was entirely predictable. Charges of such misconduct go back for months when it was first discovered that mortgages and other mortgage-related documents had been “robo-signed” and foreclosure documents hadn’t been properly reviewed and that Goldman’s Litton Loan Servicing unit took actions “without always confirming that documentation of ownership was in order.”

The ruling requires Goldman to write down some mortgages that it holds, pay an unstated restitution, and provide “remediation” to homeowners who were hurt in the collapse. The ruling doesn’t preclude other enforcement actions from state banking regulators who are continuing their investigations into the matter, either, so additional sanctions may reasonably be expected soon.

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